Charlie Scott has more than 30 years of first-hand home building experience, much of it in senior management positions with an award-winning, nationally recognized Midwest builder. Currently, he's director of Woodland, O’Brien & Scott for Constellation Homebuilder Systems. Scott helps North American home builders grow their own customer-centric cultures, pursue operational excellence, and increase referral sales. Write him at Charlies@woodlandobrien.com.

The Need For Speed

To home builders, speed is a highly valued commodity. It is not unusual to hear home builders boast about fast build cycles, lightening fast product development, near real-time custom pricing quotes, etc., right? Yes, it seems we are laser focused on, and maybe even addicted to speed in developing land, designing plans, and quoting homes, but is this speed really important to the customer? That is a tough question that I can't answer, but here's a speed question I can. Is warranty service speed important to the customer? Answer: Oh, yeah!

For this blog post, I visited our Woodland, O’Brien & Scott customer satisfaction virtual laboratory to run speed experiments on our database of nearly a million surveys. The test question was: What happens to customer “Willingness to Refer” when their builder is “late” in completing customer warranty service requests?

The test:

Using our 11 Month Post Closing Survey’s question, “Were warranty work orders completed in the promised time frame?” I studied a sampling of customers who indicated “YES” versus customers who indicated “NO.”

The results:

On Time Warranty Service: The 11 Month Post Closing Survey customers who indicated their warranty work orders were completed within the promised time frame lost only 2.7% of their willingness to refer their builder to family members or friends from the time of Closing to their 11 month anniversary (95.6% at Closing down to 92.9% at 11 Months).

Late Warranty Service: The 11 Month Post Closing Survey customers who indicated their warranty work orders were NOT completed within the promised time frame lost a staggering 31.3% of their willingness to refer their builder to family members or friends from Closing to their 11 Month anniversary (87.8% at Closing down to 56.5% at 11 Months).

The take away:

Speed truly is valuable to customers in post closing warranty service. Completing warranty work orders within a promised time frame (faster) is a significant customer satisfier that pays back the builder with substantially higher customer referral activity. Builders not completing warranty work orders on-time can lose 10X their customer’s willingness to refer. Furthermore, you may want to share the importance of this warranty timeliness with your trade partners as customers make little distinction between their builder and trade partner performance.

If you want to know more about this study, or the study we did on how much time customers will give the warranty team to complete warranty service requests before they lose their willingness to refer, please contact me. I promise a speedy response!

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